BoI grants perks to EV manufacturers
The Board of Investment (BoI) chaired by Prime Minister Prayut Chan-o-cha on Wednesday approved a fresh privilege package for electric vehicles (EVs) following the expiration of the previous package in 2018.
The fresh package includes a three-year tax holiday for manufacturers of plug-in hybrid vehicles and a maximum eight-year corporate income tax waiver for battery EV producers.
It aims to facilitate the 2030 EV roadmap drafted by the Industry Ministry, which calls for EVs to account for 30% of total annual car production, or 750,000 units out of a projected 2.5 million, by 2030.
Duangjai Asawachintachit, secretary-general of the BoI, said the new package covers all major aspects of the supply chain, focusing on battery electric vehicles (BEVs), local production of significant parts and commercial vehicles of all sizes, including buses, trucks, motorcycles, tricycles and ships. The previous package focused largely on cars and passenger vehicles.
"The board approves a new package to align with the government's policy to promote EVs across the board, and to respond to the radical changes underway in the global car industry," said Ms Duangjai.
For four-wheel vehicle manufacturing, the promotion will focus primarily on battery electric vehicles (BEVs). Those investing at least 5 billion baht will get an eight-year corporate income tax exemption. They are also entitled to additional privileges if they invest in R&D.
Those investing less than 5 billion baht will be entitled to a three-year tax holiday, with additional privileges for those who meet criteria such as production commencement by 2022, additional parts production, a minimum production of 10,000 units a year within three years and R&D investment.
Manufacturers who produce plug-in hybrid electric vehicles (PHEVs) will be eligible for a three-year tax holidays, but they are required to make EV parts for at last three pieces.
Companies investing to produce motorcycles, three-wheelers, buses and trucks will be entitled to a three-year corporate income tax exemption, plus additional privileges if they can meet criteria such as production commencement by 2022, additional parts production and R&D investment.
Manufacturers of electric-powered ships under 500 gross tonnage will be granted an eight-year corporate income tax waiver.
The BoI also approved adding four more elements to the list of significant EV parts, including high-voltage harnesses, reduction gears, battery cooling systems and regenerative braking systems. Producers of these four categories will receive eight years of corporate tax exemptions.
To promote local EV battery production, the BoI also approved additional incentives for the production of both battery modules and battery cells for the local market by granting a 90% reduction in import duties for two years on raw or essential materials not available locally.
Yesterday, the board also approved allowing three new business categories access to privileges: elderly hospitals, elderly care services and clinical research.
Those investing in elderly hospitals will be granted tax holidays for five years, while those investing in elderly care services will receive a three-year corporate income tax waiver.
For clinical research, the promotion will focus on two entities: contract research organisations (CRO) and clinical research centres (CRC).
Investors will be entitled to corporate income tax exemption for eight years, with no budget requirements for investment.
In the previous EV package, the BoI approved 26 projects involving electric vehicle production worth a combined 78.09 billion baht.
These comprised five hybrid electric vehicle (HEV) projects, six plug-in hybrid electric vehicles (PHEV) projects, 13 BEV projects, and two E-Bus projects, with a combined production capacity of over 566,000 units per year.